AMC to Close 2 Auto Plants in Wisconsin : Cites UAW’s Failure to Make Concessions; 6,000 Jobs Affected
Following through on an earlier threat, American Motors said Friday that it will notify Wisconsin state officials that it plans to close its big auto assembly plant here as well as a parts plant in Milwaukee because its unionized workers have refused to grant contract concessions.
AMC had warned the United Auto Workers in early May that it would close the two operations, eliminating about 6,000 jobs, unless workers agreed to immediate pay cuts and other concessions that would bring AMC’s labor costs in line with those of General Motors.
AMC had told the union that it would notify the state of its plans to close the plants unless workers accepted its demands by Friday.
AMC claims that it has the highest labor costs in the auto industry, despite the fact that it is the weakest of the domestic auto makers. Its wages have become uncompetitive mainly because, unlike GM or Ford, last year it restored the benefits that workers gave up during the recession in 1982. The company wants the union to agree to roll back the wages and benefits that were restored so they match those paid by GM and Ford.
Kenosha Local Opposed
Although union leaders at the company’s Milwaukee plant said Thursday that they have agreed to grant concessions, the larger Kenosha union local remains opposed to the auto maker’s ultimatum.
“It is regrettable that we couldn’t get the commitments from the union that we need to make us competitive in our Wisconsin car-building operations,” AMC said in a statement Friday afternoon.
“Lacking those commitments,” the firm added, it will mail plant closing notices to state and local officials this morning in order to comply with a state law that requires a 60-day notice before any plant may be shut down. AMC says it plans to close its Milwaukee plant by Sept. 16 and its Kenosha assembly complex--its only U.S. passenger car plant--by July 1, 1986.
A shutdown of AMC’s Wisconsin operations would bring an end to domestic car production for the struggling auto maker and force it to rely even more heavily on imports from Renault, the French firm that controls AMC.
AMC currently builds the Renault Alliance and Encore subcompacts in Kenosha, and company officials have said the firm will either import those cars from France or build them in a Canadian plant if it ends production in Kenosha.
Union leaders here insist that they are still willing to talk about a compromise with AMC, but the company says its ultimatum is non-negotiable. UAW Local 72, which represents AMC’s Kenosha workers, has filed an unfair labor practices complaint with the National Labor Relations Board, charging the company with refusing to bargain in good faith.
September Shutdown
“The longer this continues, the more I think they don’t plan to keep this plant open no matter what we do,” Rudy Kuzel, president of Local 72, said in an interview here Friday.
But union officials in Kenosha and Detroit are still hoping they can persuade AMC to open talks before the scheduled September shutdown of the Milwaukee plant.
Ray Majerus, secretary-treasurer of the UAW in Detroit and director of the union’s AMC department, said in a press briefing earlier this week that he didn’t believe that Friday was the company’s “final deadline.”
“I hope they come in and bargain with us, but I don’t think this is a bluff on their part,” Kuzel added.
Rank-and-file union workers in Kenosha appear to support the union leadership’s position. Kenosha workers voted overwhelmingly May 16 to reject the company’s demands and to authorize union leaders to open early negotiations on a new contract. The existing labor agreements for Kenosha and Milwaukee expire in September.
“I just can’t see us giving up everything we’ve won just like that without bargaining,” said Marvin Sebranek, 50, a maintenance man who has worked at the Kenosha plant for 26 years. “We just wish the company would negotiate, but I feel they want to close up anyway, no matter what.”
“They want to take everything away, just by giving us an ultimatum, and that’s not right,” said Al Ciskowski, a 49-year-old Kenosha millwright.
But the company, which lost $29 million in the first quarter, claims that it has little room left with which to compromise. While it is paying its Kenosha and Milwaukee workers an average of $13.44 per hour--37 cents per hour more than the average GM worker makes--its Alliance and Encore sales have dropped.
AMC’s car sales fell 36.6% in mid-May, and the company’s share of the U.S. market, excluding imports, is now just over 1%.
Still, one reason that union leaders aren’t giving up hope is that they have been through similar crises with AMC in the past.
